AI and the Future of Economic Power - With Circle’s Jeremy Allaire

We have to reshape our laws. We have to reshape our regulations. We have to reshape very fundamental notions of things in order to evolve into this new age of intelligence, whatever you want to call it, this new age. We have to do it. It's decades of work, but it's accelerating so much faster. And so when I say it's political leadership, it's like you have to have leaders who are going to shape law to respond to this. This is not just a matter for the free market at all. This is a matter of establishing policy and the stakes are really high. And these are choices. These are choices.

Thank you Nick. Very happy to be here.

Yeah. Yeah. I'm so I mean what's interesting is I'll give you a little bit of a precursor to college because I think it's helpful which is you know like a number of people like I was part of the early PC revolution in like the early 1980s and got my hands on an Apple 2 computer in our house and just became really enamored by the empowerment that happened with that technology.

Yeah, exactly. Yeah. And like learned to program Pascal and machine code and all the fun stuff. So I you know I had fun with technology up until high school and then I stopped because high school there are more important things to do. But then at Middlebury I was studying kind of international political economy. It's a mouthful, but political science, economics, philosophy, this sort of set of disciplines and was very focused on the transformation of the political and economic system with the end of the Soviet Union and that was I was sort of studying all these different dimensions of that and had also been really interested in human rights, civil conflict, stuff happening around the world. These were just interests of mine. And in 1990, I was really lucky because my high school friend and college roommate had his work job at the campus was in the IT department. They called it the MIS department, whatever. And because of that, he needed to be able to do system administration work from his dorm room in order to do his job. So, we got a T1, which is a high-speed connection to the network, the CANET network into our room.

So, what year is this?

But well before that there was no graphical interface to the internet at all. And so I got access and I basically I was enamored. And at first I became enamored because it was an open network and it was connected to all these other places in the world and the internet was a network of networks and so you had ARPANET and you had what was called NSFNET which was the National Science Foundation Network. That's how the universities got on and you had these university networks in places around Western Europe and some even into the Baltics.

The you know Yugoslavia other places. So I got connected and basically I became enamored with this disintermediation that I was seeing and basically became obsessed with it and learned every little bit of what this technology was, how it worked, etc. There's a lot that stemmed from that. But was there and that you know that shaped a lot of ideas for me for sure.

Yeah. So here's the fun thing is so I you know I became convinced that the internet was the ultimate equalizer in terms of open publishing.

And I believed you know very much in the need for alternative journalism for you know sort of every form of idea and expression. I at the time reading Manufacturing Consent for example. Yeah. Was convinced that you know the kind of commercialization of media you know was highly distortive. And one of the things about the internet that was amazing to me and I'll use this as an example was I was studying the civil war in the former Yugoslavia. Of the, you know, Kosovo and Bosnia and Croatia and Serbia and all that mess that happened there. And what was amazing about the internet then, this is before there's any web browser, was I was able to connect into people in Croatia, people in Serbia, people in Montenegro, people in Sarajevo, and I was able to get the coverage and the accounts and the media. And then I was able to get the media that was coming out of Russia and the media that was coming out of the UK and the media that was coming out of the US. And what I saw was that essentially like truth is complex and so you had all of these different perspectives on things and that was kind of a radicalizing thing for me. It was like this open publishing was going to bring more awareness. So I anyway, fast forward to your question. I was very I was fascinated by all of Noam Chomsky's works both his cognitive linguistics works and his political works and I approached him in 1993 and said hey I you know there's this thing it's the internet and there's this emerging thing called the web and I would love to take your works and make them available and then anyone in the world could access them. And he said, 'This is a great idea.' I flew out to his house in Lexington, had bagels with him and his wife, went into his office above his garage and just sat with him for hours as we copied stuff onto these discs off of a proprietary word processor that had been made by MIT for MIT people. I forget what it was called but yeah kind of brought that over and then yes laboriously went through the process of creating the archive.

Very much yeah absolutely and so I mean I've always been interested in understanding these like global systemic structures of power, how do those work? You know the history obviously the history of the world and really understanding that through a different lens than you get through the history books.

So there's a well before Broadvision which was Allaire which was the first company, but I'll walk through that. So basically so I was sort of you know ideologically deeply committed to the internet. I became an early member of the EFF. I traveled to their headquarters. I met Mitch Kapor you know I was very interested in all that but I was also very interested in this concept of new media alternative publishing. How could you build publishing engines for a broader set of voices that could come online? I was reading The Atlantic. I was reading a lot of stuff. What I thought I wanted to be was an internet journalist or whatever that was. I thought I was going to kind of create a new media company basically. And I created something called New World Media, which was I had owned the domain. I don't know it disappeared at some point, but I was very committed to this path. And I started working on ideas for how could you weld together the sort of digital media publishing. This is like 1994. With community meaning like communications of people of shared interest and activism tools that you could use over the internet to like be more effective in doing activism. Think like ActBlue today or whatever. And so I was like I know how to do this like I can build an interactive system on the web. You don't need traditional software and I became really convinced that the web was an application platform and you could build interactive global online services that combined all these things and I started doing that with the technology that existed and it was awful. The tools to do it just didn't exist. And so my brother who had self-taught in computer science, self-taught in programming was like there's a better way. So we collaborated him as sort of the architect, me as the kind of customer product designer and created something called ColdFusion. Or actually now there's going to be maybe cold fusion, but back then it was obviously mythical. But that was the name of the product we built which was the first web programming language, commercial web programming language that made it really easy. So if you could learn how to use HTML, you could build an interactive app on the web. And so basically built that and then I was building my vision for this new kind of media community activism stuff and but then was so involved in the work of building this product that I was like I just want to do this and so joined my brother and a number of college friends in co-founding a company that then eventually went public and eventually merged with Macromedia and I was the CTO there and so on. So, but we basically that led to kind of creating a lot of the really powerful tools for building the web.

But I also having grown up with the PC revolution, I did idealize the great entrepreneurs, Steve Jobs, Mitch Kapor, Bill Gates, like these people who created the tools that made this technology something that could empower the world. And so I really saw and my brother and our friends were like we can do that for this new chapter which is such an exciting chapter and that's what we did. We were in our early to mid-20s we didn't know what we were doing but we ended up having a very successful company.

Yeah. Yeah, I mean in a sense. Yeah. So at Macromedia as the chief technology officer in 2001 2002 we worked on kind of upgrading the infrastructure of the web to have rich forms of media communications. We built protocols for video and communications and we built the tools to make the experience of the internet a much higher fidelity experience. And so I was very motivated by that and I basically in that thread which goes back to that origin interest I became convinced that essentially video would become as ubiquitous as text that everyone in the world would be able to publish it that the opportunity both real time video and asynchronous published video would explode and back in 2003 2004 things like mobile devices weren't Wi-Fi had barely started. Connected devices were theoretical, but you could see all the pieces. And I basically became convinced like there's this video publishing revolution. There's going to be an internet television revolution. This is the richest form of media that we have. Like this is a huge opportunity. And so I was incubating those ideas at Macromedia. Went over to General Catalyst when it was founded as a venture capital firm. Incubated it there and then started Brightcove.

Yeah. So, it was interesting is in the early 2000s both while I was at Macromedia and then in the early days of Brightcove I was very involved in what people call web 2.0 stuff and so building the read-write web everyone can be a publisher I worked on the XML the technical standards RSS Dave Winer who created a lot of the blogging software Evan who had created Blogger and got really involved in that and that to me felt like hey this is a way for us to maintain this distributed model and to empower more people to participate. And so for me that was still remained a huge goal. And you know I think the video publishing revolution also looked like it could be that but I think what happened obviously ended up being different right which was social media emerged and social media became highly aggregating in terms of the publishing platforms the publishing platforms became the messaging platforms the media platforms we all know the history there so that didn't work out you know and I think you're right we ended up with these very centralizing forces. However, the open architecture of the internet remained and you know, if you think about what took place with the infrastructure layer, the stuff I was doing in the early 90s with like how do you build an interactive website and set up a server and do all that like by the mid 2000s like AWS existed the whole stack you could crank up a startup and you could crank up an application and anyone could get to it anywhere in the world. You could stick it in 2008, you could stick it on a touch screen and it could go global. And so,

So, yes. So, the clouds became, you know, there's a winner take most market structure like there's like five in the world, you know, because you count, you know, Alibaba and Tencent and then the three or four over here. And so you did end up with that. But you still had you know this sort of anyone can create an app, anyone can create a site etc. But it was with compromises obviously.

Yeah, 100%. Yeah. I think so to connect the dots on that on all that basically I was running Brightcove obviously in 2008 2009 when the great financial crisis happened and navigated that as a lot of companies did it was supposed to be the end of the world things didn't quite end but in 2009 and then going forward from 2009 I found that outside of work and family my primary interest became understanding the global financial system, the global monetary architecture. What happened? What is money? How does central banks work? What is this architecture? And in a sense I think for me I was always interested and this goes back to my origin interest in the internet. My belief in the internet was this distributed network that connected people everywhere where anyone could connect over open protocols and open networks was that that had the opportunity to accelerate the way in which the world was integrated and could economically be integrated and understanding of culture and a lot of these ideals. So I really believe that the internet itself would advance the cause of humanity and lead towards better coordination and better economic integration and that you know in the classic formulation you know countries that trade together don't go to war that essentially we could this could help support a more stable world. And so that goes back to my Middlebury days but then fast forward to the great financial crisis. What happened in the aftermath of the great financial crisis was it was one of the first times when the major governments of the world many of the major governments of the world kind of got together and said we got to do something differently and there was an effort even to think about like global currency models and it was in a period where also China was being introduced to the WTO it had become ascendant there's some optimism that we could kind of have a global political economy that was more stable. We were still in that post-cold war era where it was like maybe we are converging. And so I was really interested in like what went wrong? What could the future of the global political economy be? How could you design a financial and monetary architecture that was better? This was purely interest and academic. There was not an iota of technology related to this. This was purely just thinking about this stuff. And then in 2012, I encountered Bitcoin. And I would just say it was just like a boom in one of these boom moments for me. And I think if you take my kind of mixture of lenses, right? What I saw was, wow, this is not just a computer science breakthrough, but this is the kernel of a missing infrastructure layer of the internet.

And that this bigger idea of the internet and of a more integrated global economic system and really an opportunity on first principles to rethink the monetary architecture. Not saying Bitcoin as the reserve currency of the world but to really rethink the technology architecture of money, the monetary architecture of the world and an infrastructure layer which my interest was in blockchains as computers basically blockchains as operating systems distributed network operating systems and that was written about early on it didn't actually actualize for several years but that was the interest and my co-founder and I Sean kind of looked and said that's what's going to happen and So became completely convinced that this was going to be the future of the global financial and economic system and even eventually like the global political economy and that's a big phrase I realized but that was the interest and I was completely convinced.

Yeah and I yeah totally. Yeah. And I think there was a divergence in the early crypto community between the kind of hard money ideology and this is really just about that and this is a breakthrough computing paradigm that opens up a whole new array of what we could do on the internet with decentralized contracts, organizations, corporations and the ideology even in early 2013 2014 there was a whole community of people that were interested in wow we could actually put governance decision-making contracts we could put all this substance of the economic system onto these networks and make it so that they can work consistently around the world and globally.

Yeah, I mean look, I think we were very focused from the very early days on solving an initial problem and the basic thesis was that this technology would make it possible to essentially create an HTTP for money.

Just like we had an HTTP for information and data, we could have an HTTP for money and that you could create what Sean and I talked about. It's like a protocol for dollars on the internet. And but there was a whole architecture to this which was this idea that we needed to have a sound money. And so there's Bitcoin as sound money, but there's also this idea of full reserve money, which is that the dollars that we have are fully reserved.

And narrowly banked is a phrase people use. And that the base layer of money on the internet should be this ultra safe thing, basically the equivalent of a government obligation. And that you could create essentially just like Bitcoin, you could create a digital bearer asset, a cash-like asset that was a dollar, but that ran over a protocol that essentially was open global permissionless allowed anyone to interact with it, program it, build on it, and that through doing that you could effectively make storing and moving value commoditized just like storing and moving information and data was commoditized. And we believed that the technology to do that would take three to five years to be able to actualize that the ability to accomplish that from a legal regulatory other perspective was, you know, basically people said you're insane. It'll never happen. All this sort of stuff. But we sort of said that's what's going to happen and it'll probably take five to 10 years and within that time frame like essentially at the end of that you'll have this protocol for dollars on the internet and you'll be able to transact globally instantly anywhere at almost no cost. And then the second idea which goes back to the founding of this was that you'd have programmable money. And that what that meant is that these networks, these blockchain networks would become operating systems. They'd become computer networks where you could publish code aka smart contracts that could actually intermediate that with complex contracts and capabilities that you'd have software intermediate money, machine intermediated money. And even back then this idea of we could actually have essentially autonomous software machines on the internet interacting with money and when that happens and I thought that's 10 to 20 years you know so and I told all the early employees when that happens you could actually reconceptualize every single building block of the financial system and the economic system and move it into that kind of infrastructure. It was pie in the sky. Totally pie in the sky. And so we relentlessly focused on the first thing. We had detours and other things we did along the way, but we kind of really relentlessly focused on it. And then when it became technically possible to do it in like 2017, we built it in 2018. We launched USDC,